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How Lean Management transform an entire organization

We are in 2017 and the competition in the technology market is tough. Lean management is allowing companies to stay competitive, being able to beat the competition every single day.

Lean originated from the Toyota Production System, which was the way Toyota found to be competitive in the Post War. Having visited USA, Taiichi Ohno recognized something in American supermarkets. The scheduling of work wasn’t driven by targets but by actual sales. This reflection was fundamental for the definition of a Pull System, which allowed Toyota to be more flexible producing only the units required and reducing the total costs of stocking.

One of the main principles of Lean is identifying value as perceived by the customer. Depending on the area you are studying, this might not be so easy to define, but once you understand what customers really want it is way more simpler to keep them happy, delivering the exact amount of value they are expecting from you.

Imagine Lean as a set of tools and principles that help you managing your projects, giving you some advantage in many situations. Two of the greatest benefits of following Lean principles are the organization inherent to the culture you’re trying to implement and the way tools integrate with each other.

Another focus of this Lean Environment is the quality of products and the continuous improvement associated. One time is enough if you do it right the first time. According with Lean, one of the worst wastes is the rework, and people are doing it all the time. Some years ago, it wouldn’t shock you if the product you would buy wasn’t working properly, you would go to the store and they would change for a new one. Nowadays, customers are much more demanding and don’t even expect anything but a product completely operational. Lean principles and methodologies helped many companies in the last decades to reach a high level of quality, mitigating this reality I mentioned.

Lean thinking is one of the effective way to transform the way organizations operate. Sometimes people face processes that are done the same way for years and nobody stops to rethink the whole process. Technology changed the way people work and you really need to question yourself if you’re doing it the right way.

Lean organizations encourage their people to improve continuously by giving them the chance and resources to implement new ways to operate. This kind of proactive action definitely requires a safe environment where people are not afraid of trying new techniques. This culture needs to be managed by a Lean Leader who has to be always available to help, not only implementing but also making sure the organization follow the changes and contributes to integrate the change in company’s culture.

There is usually a strong resistance to change for many people that wouldn’t mind keeping the Status Quo. This resistance often comes from those who are going to benefit from this change, however it seems to be part of human nature to resist any type of change at all.

The people who work in a company define the organization and we must remember that people are different. To reach everyone’s attention and to change the way people see their work you should adapt your communication to every single worker, let them comfortable to ask any question and to give real feedback without any consequences.

Maybe because changing is hard for us human beings, we tend to create some resistance to that change. The reality we face today tells us that technology is improving our work exponentially, and as Peter Drucker wrote, “People have to believe that it has 10 times the advantages of what people were previously doing”. Drucker was a leader in the development of management education, created the concept of management by objectives and self-control. He also has been described as “the founder of modern administration”.

Quidgest is creating information systems that are providing data to make better decisions. These systems are one of the most flexible tools when developed according with customer needs, which is exactly what we do. The implementation of these systems may be almost a futuristic way of working for those who are used to older processes and ways to do the job.

This concept of working with the technology has been changing our jobs for better. Many people consider this evolution a threat but nowadays we already have plenty of proof that humans will become way more productive when they delegate repetitive tasks to machines. We just need to embrace the change and make the difference!

Industry 4.0 is not a futuristic concept, it is already a reality that begins to have an effect on the operational indicators of companies. At the basis of this revolution is the digital connectivity that comes from the massive use of the Internet. Products, machines and people are networked, increasingly in number, through digital platforms that provide information in real time. Several concepts and technologies inhabit initiatives related to Industry 4.0: interoperability between machines, Machine to Machine; Internet of Things; repositories with massive amounts of data (Big Data); data analysis and real-time decision-making in the digital world with fractional second-to-second delays relative to events in the physical world; Artificial Intelligence, either through the use of Chatbots in interaction with humans, or through Machine Learning algorithms. Industry 4.0 is not, therefore, a chain or a fashion, but an evolution that guarantees benefits such as reducing costs, energy, increasing safety and quality, and improving process efficiency. Industry 4.0 is already a reality and the way we deal with production is changing. It is up to us to take advantage of its benefits for the competitiveness and the success of the business.

Mobility, use of social networks, remote access, infrastructure and cloud services, Internet of Things, data analysis and big data. Words like these come to your mind when talking about digital transformation? Much more than a bunch of fashionable words (some not so much…), digital transformation involves the restructuring of processes and the absorption of a digital culture, aimed at generating productivity gains in several ways: -Better customer experience – New ways of marketing products and services -Optimization of the chain of processes – Assisting in strategic decision-making. This, just to mention some of the most relevant advantages.

Ask yourself 3 questions when planning your digital transformation:

-What new benefits can be made available to customers in order to realize more value in your product or service?

-How can your chain of processes (internal, with suppliers and partners) benefit from this transformation?

-What are the consequences of this for the company’s results?

Here, I leave 3 links for those interested in this topic, to better understand what digital transformation is and how you can optimize your business processes:

“Every business is a software business”, as Watts S. Humphrey, the father of quality in software and CMMI, said two decades ago.

The CEO of Microsoft, Satya Nadella, repeats the message: “all companies are software companies”. “Every company is a software company. You have to start thinking and operating like a digital company. It’s no longer just about procuring one solution and deploying one. It’s not about one simple software solution. It’s really you yourself thinking of your own future as a digital company.”

We call this change of vision, this metamorphosis of the companies and all its implications, Digital Transformation.

Software is the ultimate source of capacity, competitiveness, innovation, quality and agility of companies. And it is the continually updated repository of our knowledge.

If your organization provides services, the software probably coordinates the entire workflow, supports customer service, builds loyalty, manages the treasury, or aggregates indicators for management decisions. If your business is industrial, the software probably controls the acquisition, production, stock management, marketing, sale, or distribution. When more than 95% of your organization’s operations can be supported by software, it is undeniable that your business is a software business.

Your organization is a software business, even if your activities are not yet managed by software. It is enough that they can be. Because your competitors, particularly the most innovative and disruptive, are taking steps to digitalize all the activities that cab be digitized. Or they are born digital, with all their activities already executed or supported by software. In any case, the possible inattention of your organization pays dearly.

Activities carried out and supported by software include activities that, until now, were reserved for knowledge workers. Like software programming, which is automated at Quidgest.

As it is ultimately the software that determines the quality, speed and scale of your activity, it is the competitiveness of your company that is in question.

Over the years, the relationship between software and the management of organizations has not been peaceful. “I see software everywhere except productivity statistics,” said Nobel laureate Robert Solow in 1987 in what became known as the Productivity Paradox.

For years, information technologies have taken advantage of the business, more than they have served the business. With the technological diffusion, with the emergence of technologically better prepared decision makers and with constant innovation to remove technologists from their pedestal, this situation has been reversed. However, the cases where the software and the infrastructure supporting it (hardware, networks and communications) take up too much of the organizations’ budgets, giving little to the business in return, are still common today. That is, it does not provide competitive advantages, productivity increases or better experiences for the organization’s customers. There is a very significant potential for change, while reversing these cases and divesting these suppliers.

The trend of software serving the business has also been enhanced by the contribution of more conscious and committed software producers who have developed and followed approaches such as Agile, DevOps or Model Driven Development.

But digital transformation goes further than just serving the business. Digital transformation is putting the software at the center of the business, in the center of the organization’s activity. Software and business are no longer distinguishable from each other. The vision of one is the vision of the other. It is impossible to separate what is software and what is business. Any management measure applies through software. Any learning is done collectively by integration into the software. There are no areas of the business that are not covered by the software, nor software features that are not required by the business. The pace of software and business change is identical, and very high.

Applying the concept to our reality, what is the future of companies, in which we work or with whom we work, as software companies? What is the future of organizations such as CGD, CEMAH, EDP, Sonae, ADENE, CP, SIBS, INA, CCDR, Galp, Competition Authority, Universidade Nova de Lisboa, Águas de Portugal, Secil, Autoeuropa, Brisa, Civil Protection or Quidgest as software companies? Are they, or are they going to, succeed in defining their strategy as software companies? What about their culture? Are they thinking of themselves, not as banks, training providers, service providers, shopping centers, transport companies, firefighters, construction materials producers, but as software companies?

Digital Transformation of States and Companies

The strategic challenge of companies and states is to rethink their activity in the digital era. It’s not about buying a technology. It is about putting technology at the heart of the activity they develop.

Digital transformation is a strategic competitive advantage. But it is also unavoidable. If the economy is digital, all businesses are bound to be digital. It is not about updating technology, but about updating the vision of the business. A bank (like n26) is not a business that uses technology, but a technology that comes in the form of a bank and is inseparable from a bank. With, for example, the Portuguese startup Farfetch, it becomes impossible to distinguish software and business. With digital transformation, the software of an organization becomes its essence, its business.

All changes are difficult. But this transformation is particularly difficult to accept. Most leaders and employees of a company or public institution do not see their organization as essentially software.

If this is the case, if it is also difficult for you to design your business as a software business and think about scenarios. Imagine that your business is a digital business. What changes? Or imagine a scenario in which a new competitor, fully digital, threatens your business. What weapons would be used by this competitor? How would these allow you to gain advantages over your company?

Like metamorphosis, digital transformation is a process, a sequence. It is not done from one day to the next. It requires strategy and a strategy map (possibly a Quidgest BSC).

There are new opportunities in the digital economy. But they are more open, accessible to more players and on an international scale. Without the weight of legacy, a new entrant often has an advantage and can pose a serious threat to already established companies. The scale of digital and the absence of barriers to expansion make it impossible to be safe anywhere. Bookstores around the world felt this with Amazon.

Pre-digital companies are not doomed. A bank like CGD will not necessarily fail to enter fully digital fintech companies. But there is a threat, which has to be taken very seriously.

Digital is both a disruption and the new standard. This may be more evident in some sectors than in others, but no industry is immune. Citing the author of “Digital Vortex”, Daniel Pink: “Name an industry, and odds are it’s being disrupted by competitors deploying digital technology.”

And if today’s companies do not endow themselves with technological vigilance and the ability to closely follow what digitally-owned companies can do, they are doomed. Activities properly supported by software multiply the productivity or effectiveness of digitally-owned companies dramatically, by the thousands or millions.

However, this is far from easy to achieve, due to aversion to change, difficulties in bringing together technological skills with increasingly scarce and expensive software skills, and for lack of strategic perception.

Often, following is not enough. The former benefits from an advantageous position because it is the first, which is difficult (but not impossible) to overcome.

The key is to learn how to merge business with information technology in a way that is truly transformative.

The software will not remain unscathed to this change. The software has to change radically. It is not the old software (the typical financial management package, in particular) that will support digital transformation. But flexible and powerful software production technologies that automate the application of human knowledge, such as Quidgest’s Genio, which have the capacity to promote and dynamize digital transformation.

Digital transformation requires innovation, it is the current way of designating innovation and applying all the benefits (and risks) of innovation and creativity. Digital transformation is the innovation supported by the technological revolution of our time.

What is not digital transformation is also easy to understand. Removing information systems from organizations and expecting them, absurdly, to work better. Exclude organizations from thinking about their digital future. Denial of the possibility of digital transformation is an (effective) way of destroying an organization.

Digital transformation consists of rethinking what is the leadership of your industry, for your company and for yourself.

In strategic terms, software has gone from being neutral to being the main weapon of leadership attack strategies, and has been used in every industry by well-known companies, like Amazon (books and all) Google (advertising), Uber (transport), Booking.com (hotel reservations).

Software, used as a strategic offensive weapon, enables you to identify and deliver new revenue streams, transform customer experience, dramatically reduce costs and response times, increase efficiency and production capacity.

If it is not used by your company it will certainly be used against your company. If it is not used by our country, it will be used by other countries for their benefit and to the detriment of our development.

Business management and country government do not produce immediate, positive or negative results. However, delaying digital transformation for a sufficient length of time will certainly result in a continuous deterioration in the attractiveness of companies or countries and in the desertion of customers, investors or citizens.

The human element and education in Digital Transformation

Societies are stratifying into two groups: digital skeptics and digital transformers. The latter include, even if they are not fully aware of it, the digital natives. It is not just a generational issue. At Quidgest we have often supported, over the past 29 years, projects promoted by digital transformers not fully understood by the digital skeptics surrounding them.

The new millennial generation is entering the job market and their thinking is already global. Without great fears, the most competent learn and succeed in any country or culture.

In corporations and governments, a new generation of decision makers, managers and entrepreneurs, already born in the digital world, is causing a wave of change at an amazing rate. This generation knows, better than any previous generation of decision makers, the power and shortcomings of information technology. It takes advantage of the benefits and circumvents the limitations of technology to put into practice new forms of service delivery, wealth creation and well-being.

It does not blindly follow the technological leaders of the previous generation (it even completely ignores them). It challenges deep beliefs, and creates new business models, sometimes complementary to those that already exist, sometimes completely disruptive. The internet and the breakthrough in computing power and digital storage, available from smart mobile devices, coupled with widespread use as well as new developments in science and engineering are the main basis of this new economic revolution.

Instead, business or government leaders who say, without any embarrassment, they don’t know anything about information technology, will disappear, become irrelevant. As will their organizations, if the breakdown of ties is not quick enough.

On the jobs side, the threat “What if people run out of things to do” is not a topic that scares us. Digital transformation will create new types of employment. Even the global trend of “automation of knowledge work”, of which Quidgest’s Genio is a good example, allows us to create a new profession of Knowledge Engineer capable of creating the demanding solutions required by Digital Transformation.

The human element requires change management. Transformation is more than change, but Digital Transformation can use and inherit all the knowledge gained from change management. Concepts such as Hype Cycle and the management of the expectations of the interlocutors. The distinction between Early Adopters and Laggards. The need to give organizations some time to adapt to the new age and new rules of the game. A map of strategy execution. Your organization’s successful digital transformation will require the application of all these and other change management tools.

Digital Transformation on a global scale

Digital is global. It has no borders, although states begin to realize, and societies begin to accept, that being on the Internet will not continue to exempt digital businesses from paying taxes.

Two key concerns arise when we think of digital transformation on a global scale.

On the one hand, how will the digital transformation of societies, governments and companies contribute to the global sustainable development objectives (ODS) reflected in the United Nations Agenda 2030?

On the other hand, what new international economic order will emerge from this revolution? In fact, industrial or technological revolutions are not neutral. All have created leaders on a global scale. But they have also led to the exclusion of countries and regions. In particular, what position will this transformation bring to Europe, Portugal and each of the countries in which Quidgest operates? What companies can we support to be leaders on a global scale?

The vicious cycle nature of our growth also continues to worry. After a period of recession, the current growth has already triggered imports (notably software). The economic awareness of IT decision makers has not made much progress.

During the first half of 2017, growth in the positive balance of services, which includes revenues from tourism (and expenses with the acquisition of software abroad), was already insufficient to compensate for the deficit increase of the Balance of Payments. Our financial position vis-à-vis the exterior has worsened. From this point of view, which is essential for our future, it was a lost semester.

This is a strong enough argument to consider that the digital transformation of the Portuguese economy is necessary. The competitiveness of our producers of goods and services (and also of our tourism) depends on our software. The questions we now face are:

Can digital transformation be an engine of expansion of national technology companies? Can tourism be a facilitator of technological exchange? How to promote the Portuguese language as a vehicle for economic development? How can we immediately help developing countries and put national technology to support the achievement of the United Nations’ 17 sustainable development goals by 2030?

Be the business: Computer Science and technology in Digital Transformation

In his book, “Be the Business: CIOs in the New Era of IT,” Martha Heller quotes Mark Settle, CIO of Okta: “Large enterprise CIOs used to function as traffic cops regulating the selection, implementation and use of information technology. To be successful in today’s world, they need to serve as a concierge of IT capabilities, providing the advice and suggestions their companies need to leverage new and emerging technologies. ”

With software, it is not enough to serve the business. It is necessary to be (the soul of) the business.

In the last decade, three trends have marked the role of computer scientists in organizations. First, there was a movement from the “back office” to the “front office”. That is, from business applications to customer-facing initiatives. Second, there was a movement from “software as a support” to “software as a strategic resource”. What it meant to directly relate revenues to software costs, rationalize expenses and stop thinking about software as a cost, but rather potential source of revenue. Third, a move from “technology” to “management”, with a focus on performance, quality, information security, adoption of better methodologies (Lean, Agile or DevOps), extension to other areas of management (digital marketing), automation, industry 4.0 and time to market.

As a result, we moved from a closed, self-focused technological area to the elimination of barriers (which existed in both directions) between information technology and all other areas of the organization. In digital organizations, the general movement in society is reflected: digital technology has been democratized. Today, it is more easily accessible and belongs (a little more) to everyone.

Major security challenges also apply to organizations and people in general in this Digital Transformation course. The path of digitization has already overcome major obstacles in the last decades, although some are still not completely resolved as digital preservation. The transformation is raising other issues for discussion and regulation such as privacy and cybersecurity.

Only the most flexible and easy-to-use technologies will meet the requirements of constant change. Many organizations are hostage to rigid, obsolete, and poorly interoperable software solutions that are totally incompatible with the new pace of mobility and change.

This pace, implicit in Digital Transformation, is a huge challenge. The balance of agility, reliability and security, applying the principles of continuous integration and DevOps, enables top performing digital companies (such as Google, Booking.com, Amazon, Uber, Facebook, Netflix) to install dozens of new software solutions daily. Just like Quidgest customers.

Fundamental to cloud environments and to the current IT market, DevOps is a combination of the words “development” (Dev) and “operations” (Ops). It should be understood as a strategy to increase a company’s ability to distribute applications and services at high speed and with quality. DevOps principles help development and operation teams work together to streamline and improve software creation and maintenance. The main benefit, and also the biggest change in the strategy of a DevOps environment, is having different professionals working together. It can be in hybrid teams or teams acting together. The idea is to reduce the tension between teams so that, working collaboratively, they deliver more results to the company. By fostering a collaborative culture and stimulating teamwork, DevOps ultimately improves employee engagement and significantly increases the speed at which applications are developed and performance issues are addressed. That’s why many organizations are managing to build applications and deploy software updates faster. It is due to this strategy that Quidgest can offer customized systems in a reduced and favorable time according to our customers’ expectations.

The Portuguese technological company revenue figures show record growth due to profits obtained in international markets making up more than half of the company’s turnover. Quidgest’s global vision is clear. Over the last 10 years, Quidgest has developed its turnover worldwide.

Specializing in the agile development of management solutions, Quidgest increased its turnover by 48.2% in 2016.

While international business has doubled compared to 2015, Quidgest continues to replace imported products in the Portuguese market for the ERP area, the company also experienced growth in new areas such as banking and insurance.

Although often undervalued, the potential of the Portuguese domestic software production industry is enormous. Portugal brings together all the key factors which enhance technological innovation such as qualified experts, entrepreneurial environment fostered by the formation of clusters and public funding for these activities.

Certainly one of the most important achievements of 2016 is the company’s contribution to the economic development of countries and regions, as many countries are currently taking advantage of the technological transfer of automatic software generation, contributing to specialised job opportunities and positioning to address local projects.

The extraordinary performance of the company is due to its extensive portfolio of solutions, covering 13 different areas, together with the methodology used for their development, which enables customers to reduce costs, increase productivity and business success.

Genio is the automatic code generation platform that Quidgest has developed and allows the creation of integrated management solutions, error-free, in a short space of time, with fewer resources and, above all, customer oriented.

Quidgest currently has almost 100 employees from 12 different countries. It is present in more than 10 markets, through established offices or partnerships. For 2017, Quidgest is looking forward to increasing this list by introducing their unique and innovative solutions in other countries. This results enable the Portuguese company to increase resource allocation, in order to boost the markets in which it is currently operating, and also to explore other markets worldwide.

Internally communicated on July 21st to all Jamaican government officials, the Human Resource Management solution (HCMES – Human Capital Management Enterprise System) has already entered into pre-production stage. This is a project within the scope of the country’s Public Sector Efficiency Program, result from a strategic decision of 2013, and a procurement process closed in December 2015. It is financed by the Inter-American Development Bank (IDB), led By the Ministry of Finance and Public Service, and developed by Quidgest.

In this first phase, the system manages 14 pilot agencies, with a total of approximately 25,000 people who have already received training in the use of the tool. It will be extended, in the coming years, to the remaining government agencies, with a total of 125,000 officials. Parallel to this implementation, there is also a project to scan the Human Resources files, as part of the existing data migration strategy.

HCMES Software is being developed with Genio, Quidgest multi-technology engineering platform. This complex software has been based essentially on MVC .NET technology and Microsoft SQL Server database, and will allow widespread use in web environment and mobile devices. It is being modeled starting from Quidgest Human Resources base solution, which e.g. in payroll, has a monthly logic. However, “thanks to the agility and modeling process of Genio, changes to a weekly and bi-weekly logic, as well as language, currency and local legislation are being much easier and faster to implement than other approaches as traditional “package” or custom-made manual development”, emphasizes Hugo Miguel Ribeiro, HCMES project manager.

With the collaboration of the local partner, UHY Dawgen Chartered Accountants, this innovative solution will also drive a technology transfer process, in order to create local means for support and future developments and thus contribute to innovation and increase wealth in the region.

The Government of Jamaica believes that this public sector transformation project is crucial to keeping the country as a place of choice for work, family formation and doing business.

The Q-Day Conference 2016 under the theme “Portugal: Sun, Sea & Software” will be held on 22 September between 9am and 6pm, in Lisbon.
It is an annual conference of public interest, on strategic, innovation, entrepreneurship, decision models and internationalization promoted by Quidgest, with the support of several entities.
Has achieved over the years, renowned speakers and a great level of audience, very interested in the subjects. It is aimed at managers, public officials, politicians, IT directors and opinion leaders.
“Portugal: Sun, Sea & Software” is the theme of this year’s conference. Besides sports, Portugal is a European reference, recognized worldwide for its sunny weather, its maritime extension and tradition, as well as its tourism potential in general. It has all the conditions to be also a reference in the field of new technologies especially in terms of software management.
We will disclose our technological merit, attracting skills and combining our valences, and our environmental and cultural heritage, the ability to take an important role in the global digital transformation.

Quidgest and the Government of Jamaica signed a contract for implementing a Human Capital Management Enterprise System (HCMES) Software across all Jamaica Public Sector, a project led by the Ministry of Finance and The Public Service. This solution, jointly promoted by Quidgest and the local partner UHY Dawgen, is powered by Genio, one of the most advanced technology for Public Administration agile software development.

Quidgest and UHY Dawgen Chartered Accountants established a partnership in 2014. Since then, UHY Dawgen has been working with Quidgest to expand the projects in the Caribbean market.

By the end of 2015, the contract between the Government of Jamaica (GoJ) and Quidgest was signed. The aim of the current project is to implement an integrated system to manage the GoJ’s Human Capital. Focused on shared services with an integrated and unified vision, HCMES Software includes functionalities for both Human Resources (HR) Management and Payroll.

As well as other international projects developed by Quidgest, this project is funded by Inter-American Development Bank (IDB) under the Public Sector Efficiency Program of the country.

Quidgest’s experience in similar projects, such as SIGRHARA – the Azores Government HRIS, and Genio, the platform for rapid application development of complex information systems, were crucial for choosing its system.

“It´s with great expectation that we embrace this project. There are significant challenges such as the current processes or the local legislation, for example the salaries can be processed fortnightly, we are confident that we have everything to succeed, in particular, thanks to our HR team, our local partner, and all the enthusiastic people from the Government we have worked with”, says Hugo Miguel Ribeiro, Quidgest VP North America and Caribbean, who is also the Project Manager.

The project is divided in several phases, the initial 2 with an estimated length of 2 years, to cover all HR processes for 26,925 employees and the next 3 phases to cover the remaining 120.000 Jamaican public sector employees. The HCMES Software will then be continuously adjusted to the local continuous legislations changes and reality.